No, this is not a post about how to get rich quick. Wrong time, wrong
Unfortunately, too many people are looking for a quick fix. And, when desperation sets in, it is even harder to face the music and opt for the tried and true way. While I support free press (and the Yated could use more of it!), I think the Yated made a blunder when they published a letter to the editor about a way to "get rich quick." The original letter writer wrote back saying she received 120 calls to join the company [whose name I will not print]. Not all letters to the editor need to be published, and when you see readers crying out week after week for "solutions" to their problem, I would say it is best not to distract them with get rich quick musing promising large amounts of extra money for minimal work in the comfort of your home. It would be far better to run a column on frugality, working to change the prevailing culture one matching yom tov dress at a time.
Fortunately, Rabbi Eli Teitelbaum formulated a letter expressing his dismay and had the proper words to convey the sentiment. I'm reprinting it here because I'm sure we all know someone involved in some sort of business venture or investment that they really should not be in, either because it won't pay off (or, worse yet, will cost them financial, to say nothing of the time wasted that could have been used more productively), or in the case of the latter (i.e. investments), they just should not be "investing" yet because they just don't have the proper financial footing to be able to do so in a smart way. And entering business ventures and investments in a state of desperation can also lead to, r"l, dishonesty.
I'm re-printing this worthwhile read below (emphasis added). Keep this page bookmarked and feel free to refer friends to this letter:
GET-RICH-QUICK” SCHEMES
Dear Editor,
Reader beware!In last week’s Readers Write column of the Yated, someone suggested a solution to the parnassa crisis by joining some MLM (Multi-Level Marketing) company making the latest rounds. Once again, I must warn all the readers that these MLMs have been tried since the time of Mesushelach and the only thing they will do for you is get you deeper into the quicksand and add to your pain and troubles.
I’m sure they’ll tell you that they are different than all the rest and provide you with names of people who are making millions. It’s time people realize that there is no treasure chest hidden at the end of the rainbow and the moon is not made out of cheese. There is no quick and easy way to riches unless you inherit it.
Many people were in Amway (also known as Scamway) for many years and never made the riches they were promised. The average monthly gross income for active distributors of Amway for January 1998 was $88. This was before expenses. Anyone who dangles a diamond-studded chain in front of your eyes is only trying to draw your attention. It’s like waving a red kerchief in front of a bull. We must never allow our greed and need for money to short-circuit our normal thinking process and common sense.
Unfortunately, many have lost both their time and life-savings by investing in these MLMs. For those who want to learn more about these so-called “get-rich-quick” schemes or MLMs, I suggest they read the book “Behind the Smoke and Mirrors,” by Ruth Carter, or “False Profits,” by Bob Fitzpatrick before investing their money.
While not all MLMs are the same, one should always consult his own accountant before investing his money and never rely on the advice of those who sell the product or franchise. It’s important that you find out what the average monthly gross income after expenses is for active distributors and what percentages of them have remained in the business for more than a year.
Don’t rely on the claims of a few who say they are making lots of money or tell you that you must work very hard at it in order to succeed. What they often fail to tell you is how much time you’ll actually have to put in, and how difficult it is to sell the product which is also being sold by many others, or how cheap you can buy a similar product in a local department store. More often than not, they will exaggerate the “miraculous” powers of their product, claiming that you can’t buy anything compatible anywhere else. One wonders why they don’t sell these miracle products in all stores.
Here’s a simple piece of advice to follow. If it sounds too good to be true, then stay away, don’t believe a word they say, and run the other way. Just because someone claims that it’s not an MLM doesn’t mean it’s not. If it looks like a duck and it quacks like a duck, then it’s a duck, no matter what anyone may call it! Not all that glitters is gold!
SincerelyRabbi Eli Teitelbaum
11 comments:
I'm so glad to see this posting.
Unfortunately, so many women in our shul are involved in these MLMs (the most common one sells makeup). Every once in a while my wife is harassed into attending a "meeting" in someone's apartment or home so they can hear about how amazing the products are. Of course, the actual focus of the meeting is "Look at me! I work from home do hardly anything and I'm making SOOO much money! XYZ company is the greatest thing since sliced bread. Stop working hard for a living and enjoy the easy life like I do!"
I won't get into how much of a scam these companies are, but I'll say the following instead:
Even if this is a great idea, how many frum women can sell the exact same products to the same small market before the market is saturated?
Most importantly, do you really want to turn into one of these women constantly harassing their friends and family to buy products and come to meetings until people avoid you entirely because you're such a pain?
I love this letter, it's great! Just be careful not to lump direct sales companies in with MLM or say that NOBODY succeeds with direct sales companies.
The difference is usually that in an MLM company, you buy product from your upline who buys it from her upline who buys it from hers and it gets marked up the whole way down. You're paying more than your upline is for the same product. (I'm laughing at the Amway example because I *did* make about $88 one month selling Amway!!!! MAYBE $100. I did Amway for maybe 3 months before I saw the light).
With a direct sales company, you're buying product direct from the company and selling direct to the customer. Your upline is doing the same thing. The reason she makes more than you do is not because her commissions come from your profits (which are the SAME as hers), but because she gets commissions from the company based on the production of her team members, and bonuses based on that production as well.
So as a non recruiter with a direct sales company, it's pretty darn impossible to make more than say, $1000 a month-- you need to be peddling a LOT of lipstick to make a full time income of $3000 and up if you're not recruiting. But once you start recruiting, the opportunity and potential is truly there, but I would agree that it's NOT for everyone!
Having earned the use of a company car (I took the cash instead) and a full time income working part time hours for a direct sales company, I thank HaShem every day that I have this opportunity----- from a "real" job, I would have been soooooo fired by now--- my working hours are soooooo erratic because of my one year old twins for whom I've been the primary caregiver by my choice.
But having seen MANY team members come and go through the years, it's true-- not everyone can succeed with this type of business--- and sometimes on a bad day I doubt my OWN ability to succeed.... but with determination and yes, some WORK (hard to make $$$ without working!).... direct sales IS a good opportunity for some.
I saw the original letter this letter is discussing and I thought it was truly tacky to recruit through "Readers Write". I laughed out loud at that letter. And that company does not have a great reputation unfortunately--- the product is a decent one, if VERY overpriced.
And hello--- DON'T invest your life savings or go into major debt for something that is not a sure thing! I did not build my inventory to the level it is now until I had the customer base to support that investment. I started out with the basics. I have plenty of debt in my personal life (student loans are a PAIN!), but my business life is what will HELP me get out of that debt.
ps, js, good points!
.........Even if this is a great idea, how many frum women can sell the exact same products to the same small market before the market is saturated?........
The key is NOT to go into it thinking you'll just be selling to frummies or just to friends and families. When I interview potential team members I always ask them if they're comfortable running promotions in businesses to meet strangers to work with THEM--- frummies who want to come in and sell to other frummies simply don't succeed. Most of my successful unit members are not frum, and in a company of over 1 million consultants, I *think* that I'm the only Orthodox Jewish sales director so far (at seminar every year I ask out of curiosity how many kosher meals are ordered). The key is to step OUTSIDE your community and OUTSIDE your comfort zone. I've sold makeup to drag queens in Los Angeles.
twinsmommy- good for you that you found a successful career that fits with your parenting! What a great story. I hope others take the time to ask you more about it.
Unfortunately, I don't think many frum women would be as willing to get so heavily involved in "the outside world". It is truly unfortunate, because I'm sure there are a lot of great part time jobs and careers out there like yours, but you have to be willing to do the research, willing to put in the extra time, and willing to deal with the outside world. (To riff off Sephardi Lady: It's easier and more fun to find the matching Yom Tov dresses).
Thanks for the great dialog about MLM companies and their potential to deliver wealth. It is unfortunate in society that the focus is always on the "big goals" with complete disregard for the smaller rewards on the way.
For disclosure's sake, I do PR for Quixtar, which is the business brand for Amway in the U.S. and Canada (although we will be reintroducing the Amway brand later this year).
The dangling of gold chains in front of people's eyes when presenting the opportunity is a tactic that is used by some in our business, I'll admit. Others focus on their customer base and try to provide solutions for their life, whether that be nutritional supplements, a skin care regimen, a concentrated biodegradable laundry detergent or, yes, an opportunity to also earn some income with a business of their own.
Anyone saying this is a "get rich quick" business isn't being truthful, which is why we mandate the distribution of materials to prospects considering this business that share actual earnings and describe the efforts required to earn income to achieve their smaller, manageable goals. Yes, there is great upward potential, but that truly depends on the individual (how hard they work, whether or not they're a "natural" salesperson, and more).
Direct selling and MLM is not a black and white issue. Just like society, it is filled with good and bad practices. We hope people focus on the best practices for building personal businesses based on honesty, ethics, and great products.
Great blog and great discussion!
Some MLM's operate under different guises and attractive websites. One is blatantly geared towards women with name SmartWomen. I once spoke to a frum woman involved in that one. The amazing thing is how blind some people within them can be to the pyramid scheme.
But, in any case, I am certain tat a publication like the Yated moderates what it prints. Certainly, they wouldn't print anything that could be considered scurrilous. There should be a set policy of not using the letters to the editor forum for any type of advertisement.Letters to the editor should serve as a forum for advertising of any sort.
Ariella-You are spot on. The Yated heavily moderates letters from what I'm told. I've never submitted a letter to the Yated, although I have submitted letters to other publications, none of which have been printed. The Yated allowed an advertisement for a company that doesn't seem to have a particularly great reputation if you run a Google search.
There are huge parnasah issues in the frum community. We really, really don't want to distract people with MLM companies, schemes(especially illegal ones!), "investments" they should not be making at this point, etc.
Is Shaklee an MLM or not? Those who sell it insist it is not...
This may be old but I haven't seen you post about this guy.
Here's a great program from OURadio.org.Recent trends in family smachot, outrageous costs and heartwarming generosity, are discussed with Shia Markowitz and Harriet Rose Katz.
http://www.ou.org/index.php/ouradio/channel/presence_and_presents_at_your_simcha/
Kudos to R. Eli Teitelbaum. He has been fighting stuff like this for years. Yeyasher kocho !
The Yated lately has been much more freewheeling re letters published. Feel free to send one in yourself.
Yep, amway is not a good thing. I was with network 21 in Australia and I lost my shirt because I folllowed my upline's expert advice to dedicate myself to the fooproof teaching system.
All I made for my efforts was a few dollars for doing 100 points.
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